Strategy Non Market Environments

strategic Management in Non-market milieus 05/11 06/11. Cheetah / Hyena video ? Analogues to bloodline world o Make kill, but fanny you hold when scavengers seeded anticer o Eat fast if youre a cheetah ? rate Creation o Economic Activity ? Value Capture o Power, Leverage Companies you give rise (value you create) must be cognizant of game to advance (value capture) Boeing ? Site distribution throughout US, most Congressional districts o Helps when applying / process for contracts o Decision making process in Congress ? If solely worried nigh capturing an antelope (market milieu), wouldnt design locations for supply chain this focusing ?Recognizing hyenas (non-market environment effects) o How to ensure capture value o gap out across country (multiple congressional districts) o Helps with getting livelihood (congressionally directed contracts) ? GM locations ar more concentrated o operationally makes more sense, politics werent controlling decision making o However, whe n GM needs something from Government, may be in worse view than Boeing Wal-Mart ? Not in bigger cities o Local players (protected), politics can block entry o How negotiate, cut back around? foodstuff vs.Nonmarket Environment ? Market transactions are typically consensual and bilateral o Voluntary, fundamental 11 (bilateral negotiations between parties) ? Nonmarket transactions are rarely consensual and are almost always multilateral ? Market environment focuses on frugals ? Nonmarket environment combines political science, psychology and ethics. Integrated, Managerial schema ? Goal as a Manager is to integrate Market and Non-market system Four Is (way to analyze situation) ? Issues ? Interests ? Institutions ? Information Diebold Case ?Risks (reputational, juvenile technology) o loafer we create Ballot Security service arm, to encourage solve caper and also create profitability for firm? ? tincture issues ? Communication / marketing plan ? Reach out to political parties , additional interest groups ? Diebold should accommodate known Bev Harris, taken her call ? Diebold files suit to a lower place DMCA (may non arrive been best idea in non-market environment) o defend access to information becomes worldwide cause ? Politics is unstable o Have to be farsighted o Can not be myopic, take short term view ? Pays to set the genda (want to be the nonpareil who makes theproposal) o Proposal helps define the winners and losers o Want to be the docket setter Observations on Nonmarket Strategy &038 Analysis ? Issues generate nonmarket competition ? Market rivals can be nonmarket allies coalitions can be effective ? Your survival of objectives determines who is aligned with and against you ? Alignments of interests are often issue- proper(postnominal) ? Business can represent those who would other be unrepresented ? Institutional features matter e. g. , Federal versus State jurisdiction ?When attempting to check mark an issue, proposing better altern atives is often effective o Bring other interests into play ? If there is a problem for you at the company level (e. g. , behavior of corruption), then form coalitions and work on behalf of coalition o J&038J partner with other pharmaceutical, healthcare orgs, activist groups (help assure hatful are not acting in corrupt fashion, but for great public good) o Can expand to not just specific industry, but all businesses in area (e. g. , chamber of commerce), etc. ? When thought process about coalitions ask who benefits from my success on this issue?Goal of cast ? acquiret accept that rules are fixed (rules are not fixed) o But think about is there a way that we can change the rules to benefit the company o Dont miss opportunity to change b/c brook not considered ? Politics is about public good, but also basically about redistribution o How can set strategy to affect positively for our organization ? Complication of Politics o People are make to go to voting booth on moral co ncerns along with economic o Sometimes issues that can be large motivators may not have as large an impact as other concerns luxuriousness value Case ? 1990 task was introduced on luxury items o Huge political fight, tiny revenue generator (not important in context of toilsome to balance the federal budget) ? Why was the tax introduced if testament not have large impact? ? May have just been for the perception create impression that care about fairness in way that doesnt create large new taxes for parties ? Core constituents feel that they care about values they run on ? May have been to help reelection problem ?Opposed to tax consumers of luxury goods, manufacturers of luxury items, retailers of foreign luxury items ? Supporters of Luxury Tax foreign manufacturers of boats, people who dont buy luxury items, domestic manufacturers of luxury cars, manufacturers of substitutes for luxury items, some NGOs (anti-fur, anti-diamong) o Not an adventure that bill does not apply to GM (b/c GM was on committee working on bill) ? When make predictions in the political arena, are going to ask o Who are important interest groups, who will have power on the issue ?Large number of voters ? wealthiness / contributions / participation of group ? Do you have connections with key members of Congress? ? dissemination of voters ? Ability to get media attention (celebrities, experts) ? Is the group organized? o Who has power, who has incentives? ? Can go a long way to making predictions once have the details of the situation ? What determines the incentives for action? o Magnitude of benefits will suffer ? As a group ? As individuals (per capita) ? Substitutes and Opportunity cost ? How does this equivalence to other issues ?Expected Return on Effort ? (how much work will take / what is expected impact) ? Potential reputational costs ? Luxury Tax Coalition ? Yachts Not as many manufacturers, not as tumefy distributed (concentrated in states like Rhode Island, smaller st ate) ? Foreign manufacturers are not voters woeful position when entering country ? Cross of manufacturers (Horizontal across Rent Chains) Airplanes, Boats o Distributed Politics Spreadsheet, Cemex slipperiness ? ? ? See spreadsheet for Distributed Politics notes Modified Lowi Matrix Cemex case notes on handouts